What is your business mix between mass transit, property, advertising, and services?

LAOHA-UNYA: We have four major groups of business at BTS. The main one is mass transit. The second one is advertising. Next is property, and services. For mass transit, we have concessions for the Sky Trains, and we also have contracts for the extended BTS lines. We also have advertising in the BTS Sky Trains, as well as outside. Our company started in the property business. We have diversified out to mass transit and advertising. We still keep our property, but we are now focusing on mass transit and advertising. Lastly, services are the final aspect of our business. There are two main services at the moment. The first one is a common card that can be used for mass transit, as well as at stores such as Starbucks and other retailers. We are also working with hotels as a part of our services. In terms of revenue, the biggest contributor is mass transit. In our second quarter revenue report, mass transit accounted for about 60%. Second was advertising which made up 30%. Property accounted for about 8%. Less that 1% comes from services.

What can we expect in terms of line and root expansion? What kinds of investment in terms of Baht spent will this represent?

LAOHA-UNYA: I think the plan is to build a mass transit network in Bangkok of about 500km by 2029. We still have a long way to go. We have what we call the urgent project to implement our extension lines. For us, we are interested in the line that connects to our BTS Sky Trains, that the government calls the Green Line. There will be another two extensions by the government that we are interested to participate in as well. The first one is an extension of about 13km from Bearing station to Samut Prakan Province station and we have already started construction. The second one is from Mo Chit station to the north about 14km to 20km. I think the government will start working on that next year. The government is still following the former business model. They want to do what they call the PPP Gross Cost, which means the government will build the civil work and then call tender for the O&M (Operation and Maintenance) work. They are still using the same model as before, so if we get the project we will have to invest in the mechanical work, and we have to operate and maintain for a certain number of years. In terms of investment for these two routes, it will cost no more than 30bn Baht ($978m). Besides this extension, they are also planning other lines, such as the East-West monorail line of about 30km that will connect to our extension line in the northern region. We are interested in this project. The estimated cost will be about 50bn-60bn Baht ($1.6bn - $1.9bn). There is also another project that connects to our line at Bang Na and goes out to Suvarnabhumi International Airport.

The Sky Train averages over 600,000 passengers a day. What are your projections for the next 5 years?

LAOHA-UNYA: When the government builds what we call the urgent projects on all the lines, it will complete the backbone of the rail system. This will take about six years. This could double the number of passengers on the BTS.

Where do you see future investment opportunities for foreign investors in Thailand’s mass transit system?

LAOHA-UNYA: I think the government wants to build almost 500km of network. The supplier can come in to provide mass transit equipment because we do not have any manufacturers here yet, so this is a chance for them to come in. I think it would be better if they looked at the long term picture, being based here so they can not only sell their product, but also provide long term services like maintenance or selling spare parts. They can also come in as an investor on each project because Thai companies alone may not have enough capability to build all lines the government is planning on. I think the government currently wants participation from the private sector so there are good opportunities.

Has the government provided any incentives for companies involved in infrastructure development in Thailand?

LAOHA-UNYA: Thailand needs a lot of funds to implement infrastructure projects, including mass transit development. The government has recently created a new law to support infrastructure funds. Any business using funds to develop the infrastructure of Thailand will receive tax benefits. We are one of the companies participating in this program. Our board of directors has approved funds to be used for infrastructure, expanding our business in mass transit. There will be good opportunities for new connecting lines, so this money will help our business grow bigger. Our board has mandated that the fund size must be at least 50bn Baht ($1.6bn). The local market is not big enough so we will have to try to get funds from foreign investors from Europe, the United States, and elsewhere. This is new to Thailand but I think it will benefit everybody.

What impact does the mass transit system have on the overall economy of Bangkok?

LAOHA-UNYA: The number one impact is to stimulate the growth of the economy in Bangkok by providing people with the ability to travel. With the traffic in Bangkok, if you do not have mass transit in certain areas, it can take a long time to travel. The efficiency of the economy is not very good without the network of mass transit. People will begin to leave their car at home and use mass transit to reduce traffic in Bangkok, thus stimulating economic growth. We can also save a lot of economic costs if people use mass transit, using electricity while saving fuel that must be imported. The cost savings could be huge. The reduced usage of cars can also help to save the earth from pollution.

What makes BTS a good investment?

LAOHA-UNYA: I think the number one reason is that we have a very stable infrastructure. We also have a very stable leadership and growth of slightly more than 10%. For the long term, I believe there is stability. We have a great ability to grow more. The government wants to build a 500km network and we are the first one to build in Bangkok. In the last 20 years, Bangkok has still not changed. We call it a mono-centric city, meaning we have only one CBD (Central Business District). It has not changed in many years. Even with the network expanding out, people coming in still have to come to our core network, which gives our business a good chance to grow.